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Table of Contents
- Membership Fees and Texas Sales Tax
- Taxable Sales for Texas Fitness Studios
- Sales to Nonprofits in Texas
3.1 Purchases by Fitness Facilities - Use Tax for Texas Fitness Studios
- Local Sales and Use Taxes in Texas
- References
1. Membership Fees and Texas Sales Tax
Tax Facts You Need to Know
Most membership fees charged by gyms, fitness studios, or health clubs in Texas are subject to the state’s base 6.25% sales tax, plus any applicable local taxes.
Taxable Fees Include:
- Membership Dues: One-time initiation fees and recurring charges.
- Facility Access: Fees for using swimming pools, saunas, or specialized equipment.
- Group Fitness Classes: Yoga, spin, or aerobics classes included in a membership plan.
However, optional services like personal training or nutrition consultations are exempt if they are separately stated on the invoice.
For more details, see Texas Comptroller's Rule 3.322 on Membership Fees and Admissions.
2. Taxable Sales for Texas Fitness Studios
Fitness businesses often sell additional services and products. These sales may also be subject to Texas sales tax.
Taxable Sales Include:
- Retail Products: Gym apparel, fitness equipment, supplements, and gym bags.
- Food and Beverages: Snacks, smoothies, bottled water, and energy drinks sold on-site.
- Special Event Packages: Birthday parties or events that include facility access and refreshments.
Notes on Services:
- Massages: Taxable unless prescribed by a licensed healthcare provider for medical treatment.
- Discounts and Coupons: Apply the discount before calculating sales tax.
3. Sales to Nonprofits in Texas
Fitness studios often collaborate with nonprofit organizations, which are subject to specific tax regulations.
Tax-Exempt Memberships:
Nonprofits like the YMCA and YWCA may be tax-exempt on membership fees with a valid Texas Sales Tax Exemption Certificate.
Taxable Facility Charges:
Charges for facility use, such as tennis courts or swimming pools, remain taxable—even for nonprofit organizations.
3.1 Purchases by Fitness Facilities
When purchasing supplies, equipment, or services, fitness studios need to determine taxability.
Taxable Purchases:
- Cleaning and maintenance supplies.
- Equipment for facility use, such as treadmills or weights.
- Administrative services, including security and cleaning.
Exempt Purchases:
- Retail items intended for resale, such as fitness apparel or supplements.
To claim exemptions, provide a valid Texas Resale Certificate to your supplier.
4. Use Tax for Texas Fitness Studios
Use tax applies to taxable items purchased out-of-state or online when Texas sales tax is not charged.
When to Pay Use Tax:
- Items bought from vendors outside Texas.
- Supplies and equipment used for business operations.
Fitness businesses must report and pay use tax through the Texas Comptroller’s Sales and Use Tax Return system. For more details, see Publication 96-280, Texas Use Tax Guide.
5. Local Sales and Use Taxes in Texas
In addition to the state’s 6.25% tax rate, local jurisdictions may impose additional sales taxes, with a combined rate of up to 8.25%.
Example:
A fitness studio in Austin would charge 8.25% (6.25% state tax + 2% local tax).
Accurate calculation and remittance of local taxes are crucial. Use the Texas Comptroller’s Tax Rate Locator to find the correct rate for your area.
References
- Texas Comptroller's Rule 3.322: Membership Fees and Admissions.
- Texas Sales Tax Exemption Certificate: Sales and Use Tax Exemption.
- Texas Comptroller’s Tax Rate Locator: Find Local Tax Rates
Take Action Today!
Navigating Texas sales tax can be complex, but you don’t have to do it alone. Let Ledge Accounting take the stress out of compliance so you can focus on growing your fitness business.
Book a Free Consultation today and ensure your studio is tax-ready!
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